1) The fine for not buying insurance is a trivial percentage of the cost of insurance. It would be cheap to not buy insurance and wait until you need it. Since you can’t be denied insurance for pre-existing conditions, this is a viable option. Even people who were purchasing insurance before Obamacare will be motivated to drop their insurance if they weren’t using it much. Why pay for what you don’t use?

2) The IRS can’t come after you if you don’t pay the fine. Seriously. Section 1501(g)(2) of the act specifies that the IRS cannot subject taxpayers to “any criminal prosecution or penalty” for refusing to pay the mandate fine. Nor can the IRS “file notice of lien with respect to any property of a taxpayer by reason of any failure to pay the penalty imposed by this section.” So you don’t even have to pay the fine if you make sure you don’t have a refund coming. See? How sweet is that? You can’t be denied insurance after you get sick and there is no real downside.

3) If you are one of the millions of Americans who don’t file a tax return, you are exempt from the fine anyway. That means that about 40 percent of the people who are currently without insurance are exempt from the individual mandate. You are also exempt if you are an American Indian, Amish or a member of various religious groups.

So lets review. You can now get insurance when you need it. For example, on the day you wreck your car, break both your legs, rupture your liver and puncture your lung. Just have the missus call up the insurance company, make a subsidized monthly payment of a four or five hundred bucks and the insurance company will have to pay your $385,000 hospital bill, how awesome is that?

The best part is that, in the meantime, the individual mandate fine taxes are cheap and, if you organize your exemptions right, you don’t have to pay a cent. Hell, I am thinking about dropping my insurance policy and only reinstating it when I need it. A lot of people will.

Of course that will cause premiums to skyrocket for the poor suckers who are making our payments for us. More and more of them will join me in dropping their policies and buying insurance when they need it. That will, of course, cause premiums to go even higher for those still paying and more of them will drop out.

Eventually, when insurance for a family is about $10,000 a month, nobody will opt to buy it except on any given month when their health care bill is greater than $10,000. At that point, the whole thing will collapse like the stupid socialist version of Jenga it is.

Frankly, I don’t know what Republicans are so worked up about. Leave this ridiculous monstrosity alone and it will fall apart organically. It has a self destruct mechanism built in.

12 Responses to IRS Issues Final Rules on Individual Mandate

Under the existing rules, the above scenario will happen. It is certain. The only way that I can see that it be prevented is that if the government put a cap on premiums and pay the overage with deficit spending. That would represent hundreds of billions of dollars of deficit spending. It would take an act of Congress to allow this and, thus, the acquiescence of Republicans.

I believe that most Democrats in Congress didn’t even know what they were voting for and voted for this monstrosity in good faith and without any sort of involvement in a conspiracy.

That said, it it difficult to believe some of these poison pills weren’t built in with exactly the purpose you point out. The easy peasy lemon squeezy terms of the penalty for not complying with the Individual Mandate come to mind.